Correlation Between Hertz Global and Alvotech
Can any of the company-specific risk be diversified away by investing in both Hertz Global and Alvotech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hertz Global and Alvotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hertz Global Holdings and Alvotech, you can compare the effects of market volatilities on Hertz Global and Alvotech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hertz Global with a short position of Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hertz Global and Alvotech.
Diversification Opportunities for Hertz Global and Alvotech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hertz and Alvotech is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hertz Global Holdings and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech and Hertz Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hertz Global Holdings are associated (or correlated) with Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Hertz Global i.e., Hertz Global and Alvotech go up and down completely randomly.
Pair Corralation between Hertz Global and Alvotech
Considering the 90-day investment horizon Hertz Global Holdings is expected to generate 3.1 times more return on investment than Alvotech. However, Hertz Global is 3.1 times more volatile than Alvotech. It trades about 0.28 of its potential returns per unit of risk. Alvotech is currently generating about -0.16 per unit of risk. If you would invest 337.00 in Hertz Global Holdings on September 12, 2024 and sell it today you would earn a total of 111.00 from holding Hertz Global Holdings or generate 32.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hertz Global Holdings vs. Alvotech
Performance |
| Timeline |
| Hertz Global Holdings |
| Alvotech |
Hertz Global and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hertz Global and Alvotech
The main advantage of trading using opposite Hertz Global and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hertz Global position performs unexpectedly, Alvotech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alvotech will offset losses from the drop in Alvotech's long position.| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
| Alvotech vs. Evoke Pharma | Alvotech vs. Lantheus Holdings | Alvotech vs. ANI Pharmaceuticals | Alvotech vs. Ironwood Pharmaceuticals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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